Three questions to identify your investor type Three questions to identify your investor type
As you sit there and think about your future retirement, what comes to mind? Do you see yourself living frugally on a hard-earned weekly... Three questions to identify your investor type

As you sit there and think about your future retirement, what comes to mind? Do you see yourself living frugally on a hard-earned weekly pension allowance? Or perhaps you hope to grow old disgracefully with the sports car of your dreams?

Whatever plans you have for the future, you may well have thought about using financial investments to get there. These thoughts will have also occurred to those who come to you for financial advice. These plans and aspirations can help you decide what type of investor you have on your hands. 

To risk or not to risk, that is the question

Different customers will tolerate different levels of risk and understanding what your customer is comfortable with should be your priority. Those with disposable income may take a gung-ho approach to risk, whereas those frugally saving for retirement may accept lower risk levels. Factors such as the customer’s age, their overall objective and even their ability to comprehend risk can play a part. We recommend always using the check sheet provided by the Financial Conduct Authority to ensure you’ve covered all bases.

Hands-on?



Financial advisor software like that found at  https://www.intelliflo.com/ can be used to research specific stocks and shares and monitor trends to minimise risk. A good financial advisor will also factor in time for customer engagement. Some investors prefer a hands-on approach and can trade with little more than a smartphone or laptop. Less experienced investors or those that are time-poor may suit a managed portfolio or ETF as a less-intensive option.

On timescales

The thing an investor is saving for says a lot about them. It also gives you an indication of timescale. If someone is saving for a house they’re likely to need a return on their investment much quicker than someone saving for retirement, for example. Choosing the right portfolio to suit the customer’s short, medium or long-term goals are essential. Emerging markets, for example, are unlikely to offer short-term successes of under three years, so would be best avoided for a mortgage deposit. They may be better suited for those playing the long-game, like retirement planners, though.

There are a lot of factors that determine an investor type, but by listening to your customer’s needs and working comfortably within their risk level you can forge a fruitful relationship for many years to come.

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